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Everyone wants to be in show biz: Institutional investors have two fundamental roles, and they should stick to them

by Ted Leary

In the September issue of The Institutional Real Estate Letter – Americas, Nori Gerardo Lietz wrote a column challenging our good friend Geoffrey Dohrmann over the question of which managers were better: Big or small? Local or global? It was a fun read, and I admit that I tend to side with Nori on most of the issues discussed.

I dare not jump into the middle of a Nori-Geoff kerfuffle, but I do have a few comments relevant to the manager selection debate.

My observations come from 10 years in the asset and organizational workout business, the 20-plus years running an investment management team, and the past five doing workouts and manager restructurings for several very large public pension funds.

As a general matter, I believe smaller, highly focused managers offer the best chance for investment success. With just a couple of exceptions, I have seen little evidence that the multi-property-type global managers produce the be